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Archive: What discount will I receive for my tier 5 specialty drugs when I am in the Medicare Part D Donut Hole?

Archive: Donut Hole Discounts · updated Jul 13, 2024

You will receive a 75% discount on all formulary drug purchases.   When purchasing Medicare Part D drugs in the Coverage Gap, the formulary drug tier (such as a Tier 5 Specialty Drug) does not affect your Donut Hole discount.

So, if you purchase a Tier 5 drug - or even a Tier 1 generic - or a Tier 2 Preferred Multi-Source drug in the Coverage Gap, you will receive the Donut Hole discount of 75% (you pay 25% of retail).
  • The only difference is that when you purchase generic drugs in the Donut Hole you get credit for the 25% you paid out-of-pocket toward meeting your out-of-pocket limit (RxMOOP) and exiting the Donut Hole.

  • However, when you purchase a brand-name drug in the Donut Hole, you will receive the brand-name Donut Hole discount of 75% (you pay 25% of retail) - and with brand-name drugs you get credit for 95% of the retail drug price (the 25% you pay plus the 70% that the brand-name pharmaceutical drug manufacturer pays) toward meeting your out-of-pocket threshold (RxMOOP) and exiting the Donut Hole.

    For example, if your Medicare Part D plan covers the weight loss drug Wegovy® for plan member who also have additional accepted medical indications (such as a chronic heart conditions or diabetes), your medication may be covered as a Tier 5 Specialty Drug with 33% cost-sharing and a $1,400 retail cost.  So, when you reach the Donut Hole, you will pay 25% of the retail price ($350) and receive credit toward exiting the Donut Hole of 95% of the retail drug price or $1,330.
You can learn more in our frequently asked question (FAQ): “What kind of discount can we expect in the Medicare Part D Donut Hole or Coverage Gap?”.


Important Update:  2024 is the last year for the Coverage Gap or Donut Hole. Starting in 2025, the Donut Hole will no longer be a part of your Medicare Part D coverage.

Starting in 2025, the Inflation Reduction Act (IRA) eliminates the Coverage Gap (Donut Hole).  In 2025 and beyond, Medicare Part D beneficiaries will stay in the Initial Coverage phase until their out-of-pocket spending for Part D formulary drugs (TrOOP) reaches the maximum out-of-pocket spending limit for Part D formulary drugs (RxMOOP) - which is set at $2,000 for 2025.  After reaching RxMOOP, Medicare Part D beneficiaries will enter Catastrophic Coverage and have a $0 copay (no additional costs) for all formulary Medicare Part D drugs through the remainder of the year.

2025 Medicare Part D coverage

Phases of your 2025 - and beyond - Medicare Part D coverage